Russian stocks to fall at opening tracing US, Asian markets

MOSCOW, Oct 12 (PRIME) -- The Russian stock market is likely to start Tuesday trading with a slight contraction following the decreasing U.S. and Asian markets, analysts said.

“We continued growing on Monday in spite of the falling U.S. indicators and looking only at the oil price. … But the situation on the U.S. market keeps getting worse. On Monday, the U.S. stocks lost about 0.7% of capitalization, and on Tuesday, the futures for the U.S. indices fell by 0.3% more. The overseas investors see the risks of aggressive suspension of the quantitative easing program happening soon,” Alor Broker’s senior analyst Alexei Antonov said.

The main threat for the MOEX Russia Index is the shares of banks that are more susceptible to the foreign stock indicators, Antonov said.

“The external background is clearly negative before the start of trade in Russia as the Asian stock indices fall together with the futures for the S&P 500,” Oleg Syrovatkin, leading analyst at Otkritie Investment’s global research department, said.

The growth of energy prices supports Russian assets, but Bloomberg shows that the yield on U.S. dollar-denominated bonds of EM-countries grew by 16 basis points in the previous week, a record for the past 18 months meaning that investors are actively selling these assets he said.

“One could expect a negative opening of the Russian market given the contraction of the U.S. stock market and of the shares on the Asian bourses,” Andrei Vernikov, head of the investment analysis and education department of investment company Univer Capital, said.

The next meeting of the OPEC plus alliance where they could decide to ramp up production will happen only on November 4, so oil “bulls” can rest for a bit, while analysts are raising their forecasts for the oil prices, Vernikov said.

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